With more people working remotely, organizations are increasingly looking to connected technologies as the foundation for innovation and productivity in their workplace. Igor Bergman, VP of Software and Cloud at the Advanced Innovation Center at Lenovo, explores how to leverage insights from connected devices to enable better customer and employee experiences. If you are a business leader, wanting to drive customer-driven innovation in your organization, this is the podcast for you.
Welcome to Pragmatism in Practice, a podcast from Thoughtworks, where we share stories of practical approaches to becoming a modern digital business. I'm your host, Tania Salarvand.
With more and more people working remotely, organizations are increasingly looking to connect to technologies as the foundation for innovation and productivity in their workplace. But how can you utilize these devices to enable better customer and employee experiences? I'm here today with Igor Bergman, VP Software and Cloud Advanced Innovation Center at Lenovo, a multinational technology company with the philosophy of relentlessly pursuing innovation to make a better way of living, playing, and working. Hi, Igor, thank you for joining me.
Hey, Tania. Great to be here.
So let's go right in. I would love to hear from you a little bit about your role within software and cloud in that advanced innovation center, but also about your vision and some of the things that Lenovo is doing today?
Sure. Sounds great. So software cloud and software team, as you said, it's a part of Lenovo's advanced innovation center, and I've been with Lenovo for past year as, I would say a first leader of that team, as it was established. We have engineers from West Coast or U.S. in California and Bay Area down to the West Coast of China and even more western to the Japan. We are truly 360 degree and 24/7 operation when it comes to software development.
And in addition, we support all three segments from the Lenovo perspective, so consumer, commercial, NSMB segments. In a new era of Lenovo, and you could hear our CEO, YY, talk about transformation of Lenovo and where we're going. The core strategy it's software and services transformation of the company. And our expectations, is that within next three years the software and services revenue will make up at least 30% of the Lenovo revenue. For a $50 billion company that's a great target, very challenging as you can imagine. And obviously cloud and software team as a centralized software organization is on a critical path to that success.
And one more thing to add is our core strategic tenants in this direction is an end user engagement. And I'll go in a little bit more details after this but focused on customer and customer engagement is the core strategy tenant for cloud and software team globally.
That's really important, of course, as you mentioned, 30% of the revenue, which is quite significant, especially in an environment where we are constantly being looked at as consumers to different types of options and opportunities, but also experiences. One thing I'd love to explore if you don't mind, Igor, is that I know that you're very passionate about this idea of connected devices. And of course, how this plays a role, both in the work that you do, but also for yourself personally. Can you tell us a little bit about what your personal experience is and how that's connected to some of the things that you're working at in Lenovo as well?
Oh, absolutely, Tania. Thanks for a great, great question. Listen, there is no better way for you to learn about your customer experiences, but being a customer yourself. And obviously being in technology business for my entire professional career, and I do have a passion for these things. And I'll give you an example. In my home now, which is modest, a very small home in downtown Austin. I have over 120 connected devices. So each one of those devices I configured, deployed, integrated, and being managed by myself. So trust me, it was actually a lot of sleepless nights, but a lot of joy that brought me being able to put some of these things to play. Understand how different ecosystem work together, capability gaps, customer, user experience challenges with all kinds of different things. So I'm very, very passionate about that. I like to participate in the market, and I said, "I like to believe that I have to start with some kind of foundational understanding of our customer and challenges in this new market environment."
Something you just mentioned, Igor, well, two things. One, the fact that you have 120 devices, I'm not sure if most people even know when you say 120 devices, what that means. I think typically we think our laptop, our phone, maybe the air and heat system, maybe the microwave. Can you tell us a little bit more about what some of those are? I think that leads to a broader conversation around some of the things that I know, again at Lenovo you're very passionate about, but also as an organization, what it means, and this emphasis on from home at home. Everything really revolves around that now, and what does that actually mean? And how are you focusing on that in the organization?
Right, absolutely. Then that's exactly what I'm trying to do in my home. So what has he connected? Practically everything. I think in my home, anything from, as you said, the fans, utilities, appliances, phones, tablets, PC desktops, the irrigation system that I have in the house, my car. There are tons of tons of sensors through devices or individual devices that I use to create different scenes and make my home more livable. But you know, most important thing here is, in the past eight months, as we've been challenged on multiple fronts with a new way of work and study and play and so forth, so forth. You look at the things and the common thing that you hear is "new normal" is work from home, study from home, play from home.
I mean, it's pretty obvious the one thing that it's common here, it's from home, right? So, suddenly this game has changed on significant way. I was working on some things last a couple of days. I found out that 120 million students just in the narrow area around Texas changed their studying model. 74% of the company's plan to keep remote workforce.
So a lot of these things are here to stay and create a different new environment. Then when you start thinking about the data, and issues where the data, that this model creates with the data it's being generated like crazy and moved on a massive scale across the infrastructure that we created in the house and around the house. And it's pretty clear on a technical level that the house can not operate anymore with some kind of edge nodes and sole connection to the cloud. At this point it's pretty much out of question.
But if you look at things like that and then a smart home market itself, I think, again, it depends which analysts you look. It's nearly a $200 billion predicted in the next three years with a growth of 16%, composed annual growth of 16%. I mean, those are huge number we're talking. And again, as I said, the data generation is up 36%, 37%, just in the last eight months, compare year to year. Again, another article that I read it says that the smart home data collection will surpass 79 zettabytes by 2025. I don't even know how many zeros that has.
But it kind of gives you an idea how fast and how strong this environment is moving. And now you take a look at something like my house when you have 10, 20, 50, a 100 and 150 devices connected. And they're all coming with a different sensor, different configuration, different apps, different operating systems, different network requirements, different security requirements. The challenge for the customer for the end users becomes really, really real. And I don't have to tell you that in this new environment the weakest link of your smart home is the weakest link when it comes to security and cybersecurity, the weakest link is for the enterprise or the company you work from. So it moved from the campus environment into the home, surrounded by all of these devices, surrounded by all of these cloud services. And now you kind of start getting idea how these challenges starts popping up and create a very, very significant issues, right?
You mentioned cloud, and of course security being something that's top of mind, and how do we ensure that as we're working from home? How closely synchronized are all these aspects of our lives today? And as you think about access being really the critical cornerstone there, the ability to access things easily, efficiently, and securely. And of course, cloud being at the core of that, can you talk a little bit about how that plays out in your mission at Lenovo?
Right. So again, every customer and every environment is different, and that's what creates this complexity. That means using different services, different devices, and so forth, so forth. So a great example, you have let's say Android device and phone and your kids have iPhone or whatever. You store some pictures on the phone, some on Google photos, some on Amazon photos, some on iCloud. Trying to figure out where is the picture of your kids that you took a week ago could be a three hour exercise, right? There is simply no platform or joined smart home platform or a solution that would actually connect all of these things and use the things such as AI and machine learning to help you survive that.
And again, most important thing, given that each one of the customers has a very unique environment, very unique operating structure, you have to be a 100% user focused and being able to go what it used to be called a closed-loop model. That means you build a product, you collect the data, you build, you make adjustments into a micro loop. That means almost individual user-focused data feedback and product feature adjustment based on their value. We build a platform around it and we call it a UDS, user device service. So the micro loop platform is a service that it's focused around creating this incremental iterative user improvement based on usage patterns and data modeling to deliver, improve the environment and the value, right?
And I can only imagine how much data we're talking about in terms of having access to, getting insights from, and then being able to leverage in the right ways. Can you talk a little bit about how AI plays a role?
Well, absolutely. Let's say, an example of, one of the first applications that we build on UDS, it's Lenovo Vantage. You know, it provides a simple device management capability for users and connects and engage with a direct value, making sure your device is secure, it's usable and so forth, so forth. At this point we have over 70 million connected end users that use this cloud client on Lenovo devices. It kind of gets you an idea the amount of data we have to scribe through to understand, the user behavior patterns. And I just said, "We want to actually get to the individual user."
So AI and machine learning are playing a critical role, and from the customer expectance, and I'm talking here not only consumer, but commercial and SME, predictive is not good enough anymore. Predictive being able, you being able to tell that certain event is going to happen. It's not good enough anymore. You have to be proactive. That means using AI in order to not only to figure out the pattern, so the possible event, but also understand what are the possible mediation or value-adds to those events.
So if you just take a very simple model of monitoring a PC, let's say in a large enterprise, you could have three runaway processes and battery level and things like that, that combined together cause the performance degradation. Is not enough to go and tell an IT admin, "Hey, all of these clients will have a performance degradation because of this five parameters that's showing our AI model." But you have to tell them what they need to do about it. And provide that remediative action itself. Now, you can also translate that into the consumer business very easily. So an AI plays an incredible role in creating much better user and customer experiences.
And I'm glad you mentioned the user and customer experience. You mentioned earlier, and throughout this conversation, it's come up a few times, the strong focus on user engagement, that that's really a core element of your strategy. I'm curious. How do you use that as part of your decision-making, how you prioritize, what the experience looks like? How has that become more and more relevant and critical now?
Right, that's a great question. So you have this oceans and oceans of data and patterns and models and trying to understand what's going on, but when it comes to user experience, customer experience, most important thing is obviously to understand user needs and user behaviors. And that comes not only from understanding what exactly is user doing in every minute or every second, but it's very, very highly actually connected to the device they use. So this is where we use our strength of understanding exactly what the device is going through, how is device operating. And then abstract the patterns, user behavioral patterns out of that. We can learn about customer challenges, customer behaviors, how is the device behaving and where are the limitations and things like that.
So then you can do multiple things with it, but two very examples, simple examples is one, you focus on providing content and enablement in certain problems or resolving an issue. Or if you see that the, I don't know, the battery's running down on a regular basis, you can come and figure out how you can remediate that either through reconditioning the battery, offer a new battery replacement and things like that. But also, when you talk about the deep customer experiences that gives us an understanding, how do we need to design our products, not only software, but also hardware. What are the areas that we need to improve? How do we improve it? How do we get an immediate feedback on that? How do we change these things? Right? And again, if you look what happened in the last eight months, that gives you a pretty good idea how strong focus on our product had to be and is, on a camera, on video, on connectivity and things like that, enabling people to work remotely.
And that brings me to maybe the next area that I think personally having seen it and experienced it in our partnership, but also something that I believe you're all very proud of is the innovation front. Lenovo has really been on the forefront of many innovations. And I think it's something I know you do consider to be critical to those growth targets that you mentioned to us earlier. What do you do to enable or empower and spark innovation within your teams? And I'm also curious if you've seen any differences in how they've engaged while being more remote?
Yeah, absolutely. So that's another great question. So, you have multiple different things here, but the most important thing that I personally consider is actually a team culture. So what we have been working on the last four years in our team, and Thoughtworks team can be actually a great witness of this process is drive the cultural pillar and enable people to drive their careers and their value into the company. So focus on customer driven innovation. That means working around the environments that resolve of your customer problems. Always start with the customer problems and let that drive the innovation and what is going to happen with our products and services.
Open communication, clear ownership is one of the most important thing, and respect and integrity. You know, when we work with a partner such as Thoughtworks, we like to completely embrace the way they operate and the culture and understanding and provide peer to peer collaboration. For example, a good part of development teams from Thoughtworks are part of our development teams. They are literally treated as an equal engineering teams working against our tools with our planning, working closely with our product management teams and working on common processes and things like that.
We tend not to differentiate or distribute roles and responsibilities in the teamwork. This is one of the most important things that creates the sense of ownership and focus on a customer. So those are very, very important things for us. And I think this is why we are able to innovate so fast and move so fast in the market, especially with the UDS platform.
And along those lines, Igor, I know UDS really reflects on the user engagement capabilities and what you bring into fruition. You also talk about maybe the second important thing being around incremental value delivery, which you have mentioned throughout this conversation, but can you dig in a little bit more as to what that means to you and to your organization, and how do you really look for that? How do you test and measure against it?
All right. So when you look, the whole idea of UDS was, create a rich cloud and managed development environment that again, focus on end customer results. But try to use the platform or platform as a service, or PaaS model to enable development organizations or app development themes. If you look at again, we all been around there when you try to work on a customer application, 80% of the time you spend on your framework, on the core services, user management, device management, data collection, security, and so forth, so forth. And by the time you deliver those core features, now you're getting into an actually a differentiated feature. So what is this app all about? I don't know if it's AR, you work on a remote assistant and things like that, but you have very little time to focus on that.
Now, the whole idea is, turn this around for us, for our partners, such as Thoughtworks. And when I say for us, for entire Lenovo, where UDS can provide that user-centric development environment where 80% is already there, right? The common services, the scale, making this platform global by local from the security and data management perspective and all those things. But let the teams focus on that top 20%. That means every time when they focus on something, creating an incremental value for a customer instead of spending to work on core features.
So how do we measure that? It's a completely new measure and new way of measurement for the business. You know, we are very much focused on customer engagement metrics. So, the daily active user, monthly active user, engagement time, engagement frequency, and things like that. That creates the foundation again for creating relationship with a customer. And then eventually that creates also a monetization opportunity for us as a company. But first and most important is to create that relationship, understand the customer behaviors through carefully following some of these metrics and development process around that. Disclose the micro close-loop that I mentioned earlier. What is somebody doing? Why are they doing? What is the roadblock? How do we improve it? How do I go from million daily active users to 1.1, to 1.2, to 1.3? How do I go from individual engagement the last 30 seconds to 40 seconds to 70 seconds to 15 minutes? These are very, very important metric to us. And this is what we're focusing on today.
That's wonderful to hear. Along those lines I think personally I'm very inspired and excited about not just the goals that you've set for the organization as it relates to the growth, thinking about Lenovo as a historically hardware-centric organization that has done quite well in that space. Now shifting to new business models, new opportunities, new visions, and the fact that you've really shifted even more recently to this from home experience. Really does speak a lot to all the great work that the team is doing, but also the innovation that's just embedded into how the organization works. I'm curious from your lens, what are you most excited about as you think about Lenovo's 2021? What's coming, or what's out there that you want to experiment with and really start to touch on when you think about, what's next?
Hah, that's a great question. I want to come home and be able to set up a new device in 20 seconds. And in a matter of fact, I would either like the device to set up itself. I just walk in a house and it works. I'm just kidding. I am really, really, when I see the company or the size of Lenovo with the tens of thousands of employees and with the tens of billions of revenue there is a market leader in what they do, being a number one device company globally. Taking such a big stride and the challenge to take this what we again called global and local company into the whole new direction.
I mean, that has to excite every single employee that is on board today that has to excite every single partner that we're working close. The amount of innovation and opportunities that are ahead of us are simply unlimited, you know? It's what is going to be critical to our success is more than ever is really focus and a strategic execution of the things that are most important to our customers.
This is the moment that is, I've been product manager for my whole life. This is the moment where you gets challenged to do it all, right? And I think the strategy, the focus on getting into this whole problem resolution solution focus for our customer, not developing, delivering only best of breed devices, but best of breed customer experiences. And I think, again, we get a great support from the partners in this environment and great support from the customers for a couple of years that we've been slowly started executing on that vision.
Thank you so much. And I do believe exactly as you said, we are at a turning point where what we thought was impossible eight months ago has become possible. So now what is that next impossible that we want to go after? And it just feels much more possible. So I appreciate you sharing with us today, Igor, and joining us. I really feel like there's a lot more we can explore here. So I look forward to hearing more from you in coming episodes.
Yeah, same here. And thank you very much for your time. Appreciate it.
Thank you. Thanks so much for joining us for this episode of Pragmatism in Practice. If you'd like to listen to similar podcasts, please visit us at thoughtworks.com/podcast. Or if you enjoyed the show, help spread the word by rating us on your preferred podcast platform.